BMI View: The UK economy will set the pace for growth in Europe this year. Given the strength of recent growth numbers and the continued slew of positive macro data, we have revised up our 2014 growth forecast to 2.1% from 1.8% previously. However, we continue to warn that without a robust recovery in wages and business spending, the current rebound is at risk of losing momentum.

Despite revising up our forecasts, we continue to warn that the current growth rebound is built on weak foundations. For the time being the driving force behind the recovery has been an increase in consumer spending, which has been encouraged by rising property prices in London and other localised areas of strong property demand. Given that wages have failed to make much headway in recent quarters, the increase in consumer spending has been paid for out of already low household savings and an increase in unsecured debt. If wages fail to pickup, the current consumer-driven burst in growth could quickly dissipate, unless retail lenders are willing to take on much more risk.